All American Title Agency, LLC v. Department of Financial & Professional Regulation
994 N.E.2d 636
Ill. App. Ct.2013Background
- In 2006, SouthStar filed complaints against seven title agencies, including All American and Title Zone, leading the Department to revoke all seven licenses; the Secretary’s revocation was upheld on administrative review by the circuit court for these two but not for others.
- The Department found that White engaged in dishonest mortgage-rescue transactions, owned a 30% interest in Title Zone through a family estate, and that All American and Title Zone violated the Title Insurance Act and RESPA by not disclosing White’s interests.
- An emergency order suspended White’s loan originator license due to dishonest disbursements of about $1.5 million and undisclosed interests in Title Zone and Eyes Have Not Seen.
- At hearing, witnesses described files with multiple HUD-1 statements and irregular disbursements; Ticor canceled its contracts with the agencies.
- The hearing officer recommended revocation for Title Zone and All American; the Secretary issued a final order revoking both registrations, which the circuit court affirmed on administrative review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Title Zone's revocation was proper under the Title Insurance Act | Title Zone argues lack of untrustworthiness or ownership issues are insufficient | Secretary found White’s dishonest dealings and ownership interest violated the Act | Affirmed |
| Whether All American’s revocation was proper for HUD-1 and disclosure failures | All American contends practices were industry standard and not prohibited | Disclosures were manipulated; final HUD-1 did not reflect true disbursements | Affirmed |
| Due process challenge based on nondisclosure of Stein memorandum | Memorandum withholding denied them a fair hearing | Any prejudice cured when memorandum was provided and witnesses were recalled | Not violated; due process not shown |
| Whether the delay in hearing on appeal violated due process | Delays were prejudicial | Delays attributable to or consented by plaintiffs; no violation | Not violated |
Key Cases Cited
- Abrahamson v. Illinois Department of Professional Regulation, 153 Ill. 2d 76 (1992) (due process requires fair hearing and impartial ruling; prejudice standard applied)
- City of Belvidere v. Illinois State Labor Relations Board, 181 Ill. 2d 191 (1998) (clear erroneous standard for reviewing agency decisions)
- Metropolitan Life Insurance Co. v. American National Bank & Trust Co., 288 Ill. App. 3d 760 (1997) (judicial notice of public documents reflected in records of other courts)
- AFM Messenger Service, Inc. v. Department of Employment Security, 198 Ill. 2d 380 (2001) (clear error standard for reviewing mixed questions of fact and law)